Barry and the Art of Boutique Fitness

Barry Jay remembers the day that changed his life, because for years he carried the membership card in his wallet. The date was August 4, 1988. The card is from a Los Angeles gym called Sports Connection.

Five years of hard living in L.A. had taken its toll. Then-25-year-old Barry started going to the gym, and soon he started working at their front desk. Next he was an instructor. Then he was a sought-after instructor.

Now, he’s the man behind an eponymous chain of boutique fitness outlets, with locations on the American coasts, London, and Oslo. His company is worth upwards of $100 million, about 20 years after its creation, and won a coveted private equity investment in 2015.

The décor at Barry’s Bootcamp in the Tribeca neighborhood in New York is downtown workout-hip. In a nod to the loft spaces in that part of Manhattan, the ceilings are high, the floors concrete. The walls are painted in gray shades of camouflage, featuring the Barry’s Bootcamp logo, complete with the sergeant’s chevron.

“I think I’m going to die,” a twenty-something woman groans to her boyfriend as they walk out. Barry appears a minute later, having taught the class that brought her to that point. She’s gone, but I relay the comment. He brightens. “I love it when people say that,” he says. “The worst would be if someone say, ‘That was it?’”

We walk over to the Fuel Bar, past the refrigerator with $3 bottles of water (with Barry’s Bootcamp labels). Offered a protein shake, I follow his lead. He orders a vegan version of the PB Special, a concoction blending peanut butter, bananas, unsweetened almond milk, some protein powder, and, in my nonvegan case, some whey. His version uses rice instead.

Barry dropped 15 pounds by going back to veganism. He’d been vegetarian for seven years, vegan for three, and then experimented with paleo for a while. He used that diet to get to 150 pounds in honor of his fiftieth birthday, in 2013. He gained it back in the intervening year. In the summer of 2014, he was back to 150.

He picks up my shake tab, only to find that his was already paid for by a student. We stop to thank his patron, who it turns out is currently playing Jean Valjean in the Broadway revival of Les Miserables. Barry makes plans to see the actor, Ramin Karimloo, sing that night at Birdland, the noted New York City jazz club. “He’s the second Valjean we’ve had,” Barry tells me later. Hugh Jackman, who starred in the film adaptation the musical, was the first.

Broadway celebrities are Barry’s favorite kind. Karimloo became a client after Barry visited the cast backstage, at the invitation of Nikki M. James, who plays Eponine in the current cast. The week after we first talked, Barry had plans to see Wicked—for the eighth time.

He discovered Broadway as a kid growing up in Rockland County, a clutch of New York suburbs north of Manhattan, on the west side of the Hudson River. After seeing Annie (starring Sarah Jessica Parker in the title role), he became obsessed with his parents’ Broadway albums. Soon he was taking buses to New York and buying $10 standing-room-only tickets, watching for a seat that stayed empty through the first act, then grabbing it after intermission.

Three months of community college back in Rockland County didn’t take and he pursued a more vocational route to acting through an acting school in New York City. Upon graduating, he landed a role in the chorus in a Broadway show; he quit when the show went on tour, to Alaska. Los Angeles sounded better.

He ditched acting in favor of writing songs, scraping by for a few years. Barry’s devotion to Broadway is matched only, if incongruously, by his passion for horror movies. That led him to interview for a tour guide job at Universal, by his wits the top studio in the horror genre. He didn’t get the job. The next five years were a mid-1980s Los Angeles blur of late nights, booze, bad food, and more. Which brought him to that fateful day in 1988.

“I thought to myself, ‘I don’t want to die,’” he says.

The intervening decade found Barry moving up the gym instructor ladder. He gathered a following as he honed his teaching style, an approach that borrows heavily from his theatrical history. In person, he’s lively and intensely engaged, a personality that shows through in his classes.

He’s also, in his own friendly way, sort of mean. The bootcamp name came from the mouth of a weary client after a class he was teaching at a local box gym who said, “This isn’t body sculpting, it’s a bootcamp!” (In Barry’s telling, the story includes an expletive adjective.) When Barry told that story to his eventual business partner Rachel Mumford, she jumped on the name, and added “Barry” to it.

The opportunity to start what became Barry’s Bootcamp came in 1998, when the boutique gym where he worked—and where Rachel and her husband John were members, as well as his personal training clients—abruptly shut down. At his last class, Barry gathered up his students’ phone numbers, the foundation of his first, unofficial client database of sorts. Then, and for years, it was decidedly low-tech. “Twitter didn’t exist,” he says. “There was no Facebook. Our first check-in system was index cards.”

The business model they settled on was different from the typical gym. Monthly fees provided little actual incentive for customers to show up, especially for the gyms themselves. “I pay every month and go once a week,” he says. “It’s a dream for the gym.”

Barry’s idea was different. He created “The Academy,” where members would sign up at the beginning of the month, pay $200, and register for a series of classes. If they were going to miss class, they had to call. Not notifying risked a call, usually from Barry, asking where the student was. In one case, he sent two students—running—to the absent student’s house to fetch her.

Once they settled on bootcamp, they embraced it. Early customers were issued dog tags. If you threw up during class, you got a T-shirt. Barry went grocery shopping with some students and asked them to clean out their refrigerators of food they weren’t going to eat any more and bring it to class, where he’d donate it.

One day, a student sold out a couple of fellow bootcampers, who he’d spotted at Sprinkles cupcake store. When they arrived at class, Barry had them run to Sprinkles, take a picture of themselves there, run back and show it to him. “I heard you liked to go there, so I figured I’d help you out,” he told them. “They also burned off the cupcakes they’d eaten over the weekend,” he tells me.

Such antics, plus the workout, helped him develop a cult following at the first studio. The original Barry’s Bootcamp sits at a busy corner in West Hollywood, wedged in the center of a V-shaped two-story strip mall. There’s a parking lot underneath, a 7-Eleven next door, and a gas station across the street. The eclectic West Hollywood neighborhood—a cocktail of hip and sleazy shops, dive bars, and hard-to-get-into restaurants—unfurls down the hill.

On a sunny October afternoon (is there any other kind of afternoon in L.A.?), the music is thumping and half a dozen bootcampers are in class, behind glass in a darkened room. Outside the studio, there’s barely enough room for the check-in desk and a rack of apparel.

Barry’s sits in a complex that now offers varying flavors of fitness and wellness. There’s a Brazilian jiujitsu studio on one side, a gym geared toward kid’s fitness on the other. Upstairs, you can get a massage. A new juice bar announces its grand opening. It’s just the sort of normal-but-Hollywood milieu that gives rise to those “Stars: They’re Just Like Us!” photos in the weekly entertainment magazines we all pretend not to read.

This is where Barry’s was born, and his legend grew. One of the desk attendants verifies the running-to-the-cupcake-store story. She adds that one time, in a partner workout, one of the Spice Girls refused to keep going. Barry made her—and her furious partner—run up and down the nearby, congested La Cienega Avenue. Just outside the door, there are the stairs Barry used on early students who showed up late for class. “I wanted to create a new format where being on time was imperative, that every minute of the workout matters—where we were reminded self-discipline IS self-love,” he writes me in an email after our initial conversation.

The location, and word of mouth, also began to draw the occasional celebrity. On its website, Barry’s has references to and from notables including Kim Kardashian and Katie Couric, people familiar to almost everyone, but not always to Barry himself. Beyond Broadway and horror, he has the pop culture literacy of a recently arrived alien. When introduced to Jessica Biel, he knew her from the Texas Chainsaw Massacre reboot, not from her numerous TV or movie appearances (or her husband Justin Timberlake, also an early Barry’s client).

What keeps them coming back, Barry says, is the workout and its wicked (some would say brutal) efficiency. Each workout comprises a single hour, and involves a combination of heavy weights and cardio, the latter using a treadmill. Each instructor—one of Barry’s executives refers to them as entertainers—has his or her own method, every class. Some split the class into 30-minute segments; others go for four 15-minute intervals of weights and cardio.

Barry and the others don’t tell students ahead of time exactly what the workout will be that day (other than saying it’s an “arm day,” for instance), until they’re actually in the room. The element of surprise is part of the appeal, another way to break the drudgery many associate with the soulless routine—and isolation—of the treadmill or elliptical machine at the local gym. “There’s a whole sense of ‘I’m bored doing this alone,’” he says. “People like the camaraderie and the personal attention. It’s like we’ve livened up the party.”

That piece, the sweating-as-friendship-foundation, is critical, Barry says, echoing many in the boutique fitness space. “You know that you can come with your friends, or that you’re going to at least get to know the people in the class,” Barry says. “Then the trainer starts knowing your name and what’s going on in your life. We give out our cell phone numbers.”

This all-in-this-together approach is driving the broader boutique fitness movement, where the successful outlets give their clients a sense of community. Even if one is too busy trying not to barf during the actual class, the ability to commiserate after is deeply appealing. There’s a basic human comfort to seeing the same people at the same place.

It’s a phenomenon that cuts across a number of modern fitness phenomena, including clubs devoted to running, cycling, or swimming (or all three). We do, as the Cheers song says, want to go where everybody (or at least somebody) knows our name. Or, to name check a more recent production, the Disney tween hit High School Musical, we’re all in this together.

At Pure Barre, a Spartanburg, South Carolina–based fitness chain, that’s part of the appeal, says Jaime Wall, one of Pure Barre’s investors who became a regular after her firm, WJ Partners, acquired Pure Barre in 2012.

Pure Barre’s model, like Barry’s, is made to feel personal. Signing up for a class means the instructor can see a roster of that class before it happens. In the moments before the session begins, she can walk around and greet people by name, armed with bits of knowledge like the last time each student took the class.

“There’s a level of accountability associated with Pure Barre,” Wall says. “No one wants to go by themselves and run on the treadmill anymore. It’s a personal experience. You see the same women every time, and there’s an instant connection when you walk in.”

Barre classes involve a series of exercises inspired by ballet movements—the “barre” is the bar attached to the mirror in a typical studio.

Barre studios are geared almost exclusively toward women, promising a dancer-like body through a series of exercises mimicking ballet workouts. Depending on the approach—and there are many distinct programs—classes may mix in elements of yoga, Pilates, or other schools of fitness thought.

While the approaches vary, there’s often an element of women helping women, with a healthy dose of everyday spirituality thrown in. From Pure Barre’s description of itself: “Pure Barre is more than just a workout; it’s a lifestyle. At Pure Barre, women share a sense of community, in which they are inspired and empowered by each other’s fitness and lifestyle goals.”1

Pure Barre was the brainchild of Carrie Rezabek Dorr who, in 2001, opened a basement studio in Birmingham, Michigan. After growing it organically for eight years by moving from city to city and opening studios herself, she pursued franchisees starting in 2009.

During her itinerant period she was visiting her Denver studio and met her now husband, Frank Dorr. They married in 2011 and she moved the company’s headquarters to Denver, where the couple now lives with their son and twin girls. After the WJ Partners acquisition, the company moved its headquarters to Spartanburg, South Carolina (where WJ Partners is also based) and expanded to more than 200 studios by mid-2014.

WJ Partners is the private equity firm created and managed by Benjamin Wall and George Johnson Jr. The latter is the former CEO of Extended Stay America, who went on to create Johnson Development Associates, a real estate firm, along with the investment firm. After the WJ Partners investment in Pure Barre, the investors and Rezabek Dorr agreed to install Sloan Evans, who’d served as chief financial officer at Johnson Development, as the Pure Barre CEO.

After growing to more than 300 studios, the company took on an additional private equity investor to expand even further. Catterton, a retail and consumer-focused firm, took an undisclosed stake in May 2015; WJ Partners remained an investor. Catterton increasingly is positioning itself in the midst of the fitness economy, with investments in companies including CorePower Yoga and Flywheel. In the nonfitness world, the firm has backed P.F. Chang’s and Outback Steakhouse.

Pure Barre is only one player in the barre craze. The practice dates back to 1970, when a German dancer named Lotte Berk created a new form of exercise. The Lotte Berk Method created many disciples, a growing number of whom have created their own studios, or chains of studios, with their variations.

Other barre-oriented boutiques popped up around the globe, some spurred by the loss of Lotte Berk’s locations. The Bar Method was among the new entrants, as was Bar Bee Fit. Local and national gyms began to teach barre classes and the indoor-cycle juggernaut Flywheel offers FlyBarre at many of its locations to draw a new crowd.

Boutique fitness is difficult to define, and is probably easiest to describe for what it’s not. While some have multiple locations, boutiques distinguish themselves from the big box fitness chains like Planet Fitness and Town Sports International Clubs in the same way new retail concepts separate themselves from Best Buy or Wal-Mart. For fans of the movie Dodgeball, think Regular Joe’s versus GloboGym.

What’s more important is the business model. Monthly memberships at gyms actually work best when members don’t show up. After all, the money is rolling in and machines that aren’t used require less maintenance and last longer. Knowing the tendency to sign up and turn up only occasionally, most gyms recruit many more members than could actually fit in the facility at one time.

A company called Statistic Brain compiled data from several sources to come up with a remarkable set of figures that lay out the state of the modern fitness center. Globally, the health club industry pulls in $75 billion per year, from 131 million members. By the researchers’ estimate, about two-thirds of people never use their gym memberships and the average cost is $58 per month. Based on usage rates, they estimated that $39 per month goes to waste based on underutilization.2

While the numbers are startling, the trend of paying and no-showing isn’t. Many of us have first-hand knowledge of how much we actually use a monthly gym membership, when we have it. Especially in the era of automatically billing to credit and debit cards, it’s often money we don’t even see (versus writing and mailing a monthly check, which is more likely to draw our attention).

Most boutique fitness studios rely on a pay-per-visit model, whereby we cough up a fee per class (or buy classes in packs of five or 10 to get a volume discount). For a regular participant, it’s almost always more expensive—three classes are enough to eclipse that national average, and five to seven would eclipse the more expensive gym memberships in big urban areas. Yet the direct relationship to a specific class may make it more likely that you’ll show up.

“The gym model used to be to work hard to sign up people to a membership and hope they didn’t come,” says Imperial Capital’s Brian Wood. “Now, operators want you there, as engagement leads to loyalty, community, and engagement that is so important to these brands like SoulCycle. If you don’t show up, they will send you a reminder.”

What’s remarkable about the boutiques is the premiums they can command. Once fixed costs are covered, it can become wildly lucrative, simply based on the price points students are willing to pay. While the price varies by city and company, it’s rare to find a class that’s less than $20 a pop. Many, like Barry’s, encourage—and get—students to show up several times a week.

The fixed costs are relatively straightforward. Barry’s treadmills cost the company a predictable amount. SoulCycle and Flywheel’s capital expenditures go largely to the custom bikes.

Barry and his partners figured out early on that they needed to average eight students per class to break even, and watched that number closely. Knowing that, he was comfortable teaching a class to two or three, as long as the more popular classes drew 25.

For boutiques whose techniques require less equipment, it comes down to real estate and instructors. Real estate can be a high cost, given the need to be in key locations convenient to the well-heeled clientele.

Instructors are relatively easy to come by, given the broader push toward health and fitness. There were 260,000 fitness trainers and instructors in 2012, a figure that was estimated to grow at 13 percent a year for the next decade, according to the Bureau of Labor Statistics.3 It’s not a high-paying profession; the median annual wage was $31,720 that year.4

Yet at a time where we’re constantly told to do what we love, and the U.S. economy isn’t creating lots of new jobs, getting certified as an instructor is appealing. At Barry’s and other boutiques, many instructors come from the ranks of students who look up through their sweat and say, “I could do that.”

As the broad data mentioned above show, it’s not lucrative unless your idea really hits. Barry recalls making $250 a week in the early days—while teaching 40 classes. His business partner worked the desk. (“It was very mom and pop,” he says.)

The business grew from within the classes. One student moved from working the desk to teaching to becoming an instructor and eventually chief operating officer, mirroring the career path of the founder. Joey Gonzalez, seeing the business potential for Barry’s, pestered Barry for a meeting with co-founder Rachel Mumford until he got it. She gave him the desk job and he hasn’t left yet. He assumed the CEO role in the wake of the North Castle transaction.

Now, he’s the kind of operator Barry is not. “I have three months of college under my belt,” he said. “My business is working out. Only in the last two years have I sat up and said, ‘I should be more present as a businessman.’”

Even so, Barry’s main job in the business is to be Barry. As one of the working faces of the company—the eponymous founder who’s not just ceremonially leading a class now and then, but really teaching a slate of classes—he’s amplifying the importance of having a person representing the underlying mission, staying involved but ultimately realizing it’s bigger than he is. It underscores a modern desire for authenticity that’s pushing us more broadly toward experiences, products, and services we perceive to be real.

Fitness has long thrived on personalities of various stripes, be it Jack LaLanne, Jane Fonda, or Richard Simmons. Fitness DVDs continue to sell robustly—fitness DVDs in the United States were a $297 million business in 2014, growing 7.7 percent a year since 20095—and apps and YouTube videos are proliferating to deliver workouts to your mobile device. Still, the desire to be in the room with an instructor you can connect with is strong, especially for Millennials. While reliant on devices and screens for many aspects of their work and social lives, they have a strong desire to form relationships, with each other and with their instructors.

The effect of the personality on the business can’t be underestimated. While the per-class rate was higher than joining a gym, it was less expensive than a personal trainer, but carried some of the benefits (e.g., the personal phone calls from Barry if you missed class). “That grew the business,” Barry says. “They paid and they were showing up.”

Part of growing the business for Barry, oddly, was allowing the personality of the business to grow beyond just him. His visage isn’t part of the logo. The chain also rotates pictures of its instructors lest any of them, including Barry, become too heavily branded.

Personalities come in several forms and fashions. There are iconic inventors who bank on their own blend of skill and charm. They either are larger than life already (Fonda) or become so through the force of their idea (Simmons). Some gain a following within the confines of a single studio. We’ll see what happens when those personalities outgrow their starting bases in the next chapter. In the meantime, spinning’s an interesting way to explore the phenomenon of personalities writ large and small.

Indoor cycling—hard-charging cardio workouts that use stationary bikes—was invented conceptually in the 1980s, took hold in the 1990s (Rolling Stone named it the hot exercise craze of 1993), and became a boutique-fitness destination in its own right during the second decade of the 2000s with the popularity of SoulCycle and Flywheel. Those companies augmented indoor cycling classes that already existed in gyms all the way down to the local YMCA.

Spinning is actually a trademarked name, though it’s taken on a Kleenex-like stature in the exercise world whereby any class that involves a high-octane instructor barking instructions to students on stationary bikes is called spinning. Its origins date back to a South African cyclist named Johnny Goldberg (also known as Johnny G) who was looking for a way to train indoors for his long-distance rides. He and a business partner, John Baudhuin, created the first Spinner bike in 1992.

While a subset of serious cyclists prefer to spin at home—or buy so-called trainers that allow them to mount their road bikes on rollers—indoor cycling is largely a group sport, and still growing.

On a steamy southern summer morning in Atlanta, two dozen young professionals and stay-at-home moms park their late-model luxury SUVs outside a Flywheel location in the tony Buckhead section of town. The vibe is friendly, owing to the fact that many in the class are regulars. Flywheel, like many boutiques, relies heavily on technology to dispense with the administrative elements, like reserving shoes and bikes. That leaves more time for easy chitchat among the staff and riders.

The soon-to-be-sweaty mingle with a just-released class, which lingered for more visiting because it’s their instructor’s birthday. Cake and coffee are served and pictures are taken, destined for Instagram feeds and Facebook pages. The next class dutifully files into the darkened studio, where the instructor—a wiry, hyperkinetic triathlete named Cathy O takes charge.

The Flywheel workout is intense and designed as a more aggressive counterpoint to SoulCycle, which preceded it. It’s a 45-minute ride, pegged to a thumping, 10-song soundtrack, with Cathy O shouting exhortations through her headset all along. The trademark Flywheel twist is keeping score.

The Flywheel workout relies on two main metrics—torque and speed. A knob on the bike adjusts your torque (basically the resistance) and your revolutions per minute depend on how fast you’re pedaling. Both figures are displayed on a small readout attached to the bike, in your eye line when you’re bent over in exertion. Those results, assuming you opt in (which most do) feed the TorqBoard. It’s a dynamic scorecard that measures power exerted; personal results are displayed on screens at the front of the room.

The board stands as one more collision of humanity and technology—our most basic competitive instincts, measured and displayed, in real time. It’s easy to see how people get addicted in our current, measure-it-all society.

As often happens, the big established companies sought to learn the lessons from the start-ups. In the case of fitness, large-scale gyms that once relied mostly on rows of treadmills and elliptical machines by 2013 began to see how classes could be a differentiating factor in chasing the membership dollar. The Wall Street Journal noted in mid-2014: “People who attend classes make more trips to the gym and are much likelier to renew their memberships, data shows. Group exercise also builds loyalty by offering a spirited and social escape from days of solo commutes and time spent staring at digital screens.”6

The story describes the delicate process of introducing a new class concept amid a growing roster of choices for a fickle audience. At the time, the Crunch gym was experimenting with an exercise class concept called Disq that was designed by former Dutch speed skaters. It involves attaching resistance cords to one’s waist and ankles, with a disc on the hip to control resistance.

At gyms across the country, owners and managers perform the delicate dance of anticipating and reacting to clients’ wants and needs. Oftentimes, it’s a matter of simple economics; other times customers prove themselves to be irrational actors, in the words of economists.

Michael Olander Jr. is an entrepreneur in Raleigh who didn’t set out to be in the fitness business, despite his long-standing affinity for being fit. Now in his early thirties, he came of age in the 1990s, as the fitness boom was beginning. An overweight teenager, he joined a local health club. “Fitness changed my life,” he says. “It changed the way I felt about myself, and the way other people felt about me. Not that I was a health freak. That’s an important time to be fit and popular.”

At the College of Charleston, going to the gym remained part of his regular routine, a way to recover from a big night out, or to meet girls. As he went through school, it evolved from avocation to something that could turn into a job. For his independent study project, he opened a small boutique club, in the basement of a grocery store in Raleigh, where he grew up.

He saw a hole in a market of a fast-growing Southern city, where there was “a highly educated population, good restaurants and social scene, really strong employment and professional base,” he says. “It was a wealthy, growing town.”

The boutique was a fun project he initially considered a lark, a stepping stone along the way to a career in investment banking after he went back to school for an advanced degree, probably a combination JD/MBA. Two years into running the club, “I realized I really loved the business, and I was tired of school.”

Today he’s the owner and operator of O2 Fitness, with locations in North and South Carolina. He’s so far eschewed outside money, choosing instead to grow the business mostly organically. He’s acquisitive by picking up smaller rivals who overextend and fail, leaving a facility behind. He also acquired a slate of clubs in Charleston, South Carolina, that now operate under the O2 brand. All told, O2 has two dozen locations.

While bigger rivals need certain specs for their spaces, Olander says he can be flexible. Part of his sell is that each location leverages some economies of scale from his ownership (vendor relationships, technical infrastructure), but aims to make a unique experience for its local, regular members.

He’s trying, so far successfully, to make his way in what constitutes the middle market of fitness. “We’ll never compete on price, or offering,” he says. “We have to constantly ask, ‘What’s our value?’ and it goes back to experience,” he says. “It’s about whether you feel comfortable in a place.”

These outlets offer a high-touch, personalized experience that emphasizes building relationships, between client and instructor, as well as among the clients themselves.

And there lies a surprising lesson for Michael Olander. Part of his strategy is to offer a broad array—a full-service gym with all the treadmills and ellipticals, a pool, basketball courts, as well as studios for yoga, Pilates, indoor cycling, and barre.

One discovery was that charging extra for studio classes wasn’t a detraction—it was the opposite. His members were willing to pay his $49 per month membership for the gym, then turn around and pay another local studio for indoor cycling or barre classes. When the same classes were offered at O2, few people showed up. Once he made members pay an extra $15 to take a class, they became even more popular. The perception of the class’s quality changed once members were required to pay for it, a fascinating study in how we as consumers perceive the value of services.

“Consumer behavior is not rational,” he says. “When we charge extra for those things, there’s higher value placed on them. We build this club within the club.”

Olander is quick to point out that he designed his locations to be malleable—with studios that can easily be converted to cater to a clientele that’s eager to try the next popular thing, and by extension dump something else. It’s here that he—and the big gym chains—have the advantage.

While the overarching trend toward healthier living is steady, winning customers, and customer loyalty, is tricky. The owners of chains like Olander’s, as well as the boutique operators like Barry, have to be trend spotters and tastemakers, aiming to capture or, in some rare cases, create a moment of zeitgeist. Investors demand more than a fleeting moment of popularity.

“There’s still a market for the health club,” Olander says. “You can’t just do one thing all the time.” He aims to leverage the interest niche stand-alone studios draw to fitness overall, as well as the new and interesting formats they offer. “Boutiques make us better.”

Barry’s, for one, won a key endorsement in July 2015, when North Castle—the firm that backed Equinox to great success—took a controlling stake. The firm ultimately bet on experiences like that one, and its collective knowledge of what works best for both the body and the business of the body.

In addition to customer loyalty and science that bears out the method of combining strength training and cardio work, Barry’s also has a strong brand with a concentration in growing, affluent urban markets where more of those younger, loyal customers, present and future, are opting to live and work.

Aarti Kapoor represented Barry’s in the transaction, a coup for her burgeoning business advising fitness companies and the investors looking to give them money. Part of the appeal of Barry’s, she says, is the strength of the company’s brand, in key markets and beyond. The company opted to sign up franchisees in not-obvious markets, such as Nashville and Oslo; those locations give Barry’s backers confidence that it’s a concept that can play beyond Manhattan and Los Angeles.

Part of doing that is maintaining a level of consistency while catering to the locals. It’s a delicate balance to be both exclusive and not. “It’s a very sexy, edgy type of brand that doesn’t seem accessible to everyone,” Kapoor says. “And yet they’ve done a great job of maintaining that elevated brand while also taking a tailored approach.”

That means a 9 a.m. class in Sherman Oaks, California, feels different from a 9 a.m. class in the hip Manhattan neighborhood of Chelsea, even if the general thrust of the workout is the same. Like its rivals, Barry’s has to find ways, be it specialization or innovation, to stay a step ahead of the always-fickle consumer.

The smartest operators anticipate what’s going to be hot next, or have the flexibility to pivot quickly to the next big thing. Sometimes that means embracing the disruptors before they disrupt you out of business. Like so many entrepreneurs before them, Barry and his ilk have to outthink younger versions of themselves, some of whom are likely on their payrolls right now. After all, Barry himself started in a traditional health club.

The overlapping elements of personality and community come into play in a meaningful way here. The boutiques have upended the traditional health club and gym industries mostly through a specialized approach that uses a different business model—paying as you go versus monthly membership. At its core, it’s mostly the same business: buying or leasing some real estate and hiring people to instruct groups of people at an appointed time in a specific exercise discipline.

While investors flock to back the next Barry, there’s a subcategory of the boutique world that’s taking its cues from the so-called sharing economy—the catch-all business model that encompasses Airbnb and Uber—to disrupt both the traditional gyms and their boutique brethren.


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